Yes, it can. Blasts and bursts extend in the third dimension as they do in the second.
And now for proof.
First, the discussion where this comes up is in dimensional scramble, here:
A Large creature occupies a 2X2X2 cube, and so would be in a burst 1 centred 2 squares up. If any single square (or cube, in this case) of a multi-square creature is in a burst, it is affected as normal.
As DDI notes in burst:
A burst starts in an origin square and extends in all directions to a specified number of squares from the origin square.
Therefore, it extends a number of "squares" in the third dimension and makes math majors cry.
The way to think of D&D (all editions) handling of flight as stacked 2d grids. moving from grid to grid is always poorly supported and takes effort. A sphere is cubed.
Therefore, from this understanding, if you're supporting (effectively) 2.5d and target "up" X squares, it extends "down" from the "up" you targeted as per the rules. Be prepared for a giant headache though.